Yellow Creek used to run black for miles, with a stench that made people retch. Red blisters disfigured fish in the stream. People downstream blamed pollution from a tannery and aged sewage treatment plant in this town of 13,000 for their neighbors' cancer deaths as well as their foul well water. In 1983, the city engineer testified that 2.5 million gallons of raw or partly treated sewage had been dumped into Yellow Creek that year alone. Today, Yellow Creek sparkles as it winds quietly through the thickly forested Appalachian hills. People who live along the creek say water quality is probably the best they've seen in a decade and credit the $7.7 million sewage treatment plant built in 1986. Credit is also due to the Yellow Creek Concerned Citizens, a local environmental group that has labored since 1980, filing lawsuits, lobbying Congress, holding candlelight memorials for people they believe were fatally sickened by pollution, occupying city hall to demand that the creek be cleaned. But the black tide, although receded, left behind a legacy of health questions and lingering legal challenges. Neighbors suspect that years of tannery pollution deposited a layer of toxic sediment in the creek bed. And they're worried that a new court agreement will loosen pollution regulations. Over the years, word of Yellow Creek and its lessons has stretched well beyond this mountainous corner of southeastern Kentucky. The tactics and victories of the Yellow Creek Concerned Citizens are being studied by environmental groups across America, and in some cases, around the world. ``Remember, this struggle for the small community of Yellow Creek is in no way the only one,'' said M.M. Chiputa of the Southern African Environmental Network of Zaire. ``We have it, you have it and they have it.'' Yellow Creek has gained such attention largely because of Larry Wilson, the president of the citizens group. Wilson is environmental programs director at the Highlander Institute in New Market, Tenn., which holds training sessions for social activists who hail from Bhopal, India, to Dayhoit, Ky. As a polished insider of the national environmental movement, Wilson wields influence that last month drew more than 100 activists from Massachusetts to Arkansas to a meeting on the future of Yellow Creek. John O'Connor, executive director of the National Toxics Campaign in Boston, struck a common theme among many of the speakers at the March 31 meeting. ``We kind of feel if they can get away with poisoning people in Yellow Creek, they can get away with poisoning anyone in the United States,'' O'Connor said. Yet Yellow Creek is anything but poisonous today, according to the Environmental Protection Agency. EPA environmental engineer Ron Barrow said results of a study of creek water and surface sediment, to be released later this month, will ``show significant improvements'' over a 1982 study of creek pollution. A standard EPA test using water fleas showed they not only survived but also reproduced in full-strength effluent from the new sewage plant. And Dirk Anderson, manager of the Middlesboro Tannery Co., says it ``has done an excellent job in meeting state and federal guidelines'' and ``installed the most efficient pretreatment system in the tanning industry today.'' He says the tannery's waste water ``is one of the best discharges in the United States'' and asks, ``What is the controversy?'' To many residents, the controversy remains vivid. An advisory warning residents of Bell County since the early 1980s not to swim in the creek, drink its water or eat its fish is still in force. Wilson asserts that he ``feels really comfortable'' in estimating that 100 deaths in the valley from cancer, leukemia and other illness can be linked to the pollution. A 1988 study of Bell County cancer rates, while failing to tie the illness to creek pollution, did show that residents face an increased risk of cancer. ``Those cancers that have been linked to occupational exposure to tannery work tend to be higher in Bell County than the comparison groups,'' said the report by Lorann Stallones, an epidemiologist with the University of Kentucky Medical Center. And a study done in the early 1980s by Vanderbilt University's Center for Health Services indicated that residents who drank well water tended to have higher rates of miscarriages, kidney and digestive ailments. A $31 million lawsuit filed by residents against the tannery in 1983 requested long-term health monitoring, a proposal supported then by a leading state health official. ``Toxic chemicals often take many years to produce their effects, and certainly there have been significant exposures in the past because of the tannery effluent,'' Dr. Arthur L. Frank of the University of Kentucky Medical Center said in a statement for the lawsuit. No long-term monitoring is underway, and the lawsuit is still pending in state court. Many of these concerns deal less with the creek's current water quality and more with the sediment on its bottom. A University of Louisville chemist probing the creek bed in 1987 found deep deposits of chromium, a byproduct of tanning. In research by the National Cancer Institute, chromium is suspected of causing cancer in humans. W. Hank Graddy III, attorney for the citizens' group, said the study indicated chromium was still accumulating ``even after all these years of litigation and trying (to) ... require them to adopt controls.'' Barrow, the EPA engineer, and Bill Phillips, an attorney for the agency, said they were not aware of any complaints about chromium deposits until a reporter posed questions about the matter earlier this month. That reaction, along with other official stances, has made Yellow Creek residents suspicious of government regulators, especially the EPA. Creek residents are worried, for example, about a new court document signed by the city, the tannery and the EPA that will alter the amount of chromium, cyanide, mercury, and bacteria allowed in tannery wastewater sent to the sewage plant. Graddy, Wilson and others contend the agreement will increase the permissable amounts and cause Yellow Creek to be polluted again. Attorneys for the city, tannery and EPA all say it would tighten pollution regulations, not make the situation worse. The agreement amends a 1985 consent decree that settled a 1984 lawsuit filed by the Justice Department. That suit alleged numerous violations of EPA regulations because raw sewage was spilling into the creek. The disagreement is so strong because each side is comparing the new document to a different prior arrangement: the officials assert the provisions strengthen the 5-year-old consent decree, and the environmentalists say they are weaker than those in an operative pollution permit dating from 1985. The citizens' group also opposes the agreement because it would reduce the fines levied against the city and tannery. Together, they have been fined at least $1.62 million for federal pollution violations, but collections would total only $177,400 under the pending amendment. ``The burden of proof is on the victims here,'' Wilson said, ``because government agencies and industry already have the money and lawyers in place to defend their position. ... ``We're overwhelmed,'' he said. ``We're fighting life and death.''